Effects of Renewable Portfolio. Biomass Power Generation. Decker Energy International

Transcription

1 Effects of Renewable Portfolio Standards on Sustainable Biomass Power Generation Marvin S. Burchfield, VP Decker Energy International

2 Company Overview Founded in 1982 Entered the fledgling gindependent power business, as federal energy legislation opened up the electric power industry to competition Business objective is to develop, acquire, own and manage power generating facilities that meet the needs of the electricity it market by providing reliable, low-cost power with a keen sensitivity to the environment

3 Historical Business Approach Fuels: biomass and natural gas Conservative growth strategy Marketing through contacts and existing relationships Highly Selective Project Evaluation Opportunistic, market-responsive strategy Greenfield development when power markets attractive Special opportunities, i.e., CT Class I renewable market Acquisitions when power markets are low Situations where we can add value Ownership strategies Retain ownership in some projects Develop/acquire, improve, and possibly sell

4 Company Projects Involvement with 15 diverse power projects About 1,000 MW of generating capacity Capital cost of nearly $700 million Located in 6 states Fuels: wood, natural gas, and waste materials Current Portfolio Ownership interests in 2 biomass projects 85 MW capacity $150 million capital cost Located in Michigan and North Carolina Current development nearing construction 37.5 MW Biomass, Plainfield, Connecticut Expect Commercial Operations in Q4 2010

5 Grayling Generating Station Grayling, Michigan 37 MW capacity $71,000,000 capital cost Fueled dby waste wood and tire-derived fuel Operational in 1992 Partners: CMS Energy and Primary Power PPA: Consumers Energy Received Powerplant Award in 1993

6 Craven County Wood Energy New Bern, North Carolina 48 MW capacity $82,800,000 capital cost Fueled by waste wood Operational in 1990 Acquired 50% interest t in 2004 Partner: CMS Energy Power currently sold into PJM market

7 Plainfield Renewable Energy Plainfield, Connecticut 37.5 MW advanced technology biomass plant Targeting Connecticut Class I renewable market Construction Start Q3 / Q Commercial in 2010

8 Other Decker Energy Projects Biomass Cadillac Renewable Energy (MI) 38 MW Natural Gas Renaissance Power (MI) 680 MW Ridge Generating Station (FL) 40 MW Mid-Continent Power Ryegate Wood Energy (OK) 110 MW (VT) 20 MW DEXZEL Genesee Power Station (CA) 29 MW (MI) 35 MW United Cogen Fuels (NC) 25 MW 5 distributed generation plants (MI, CA)

9 Renewable Momentum? Renewable Portfolio Standards d as of June 2007 *WA: 15% by 2020 OR: 25% by 2025 (large utilities) 5% - 10% by 2025 for smaller utilities NV: 20% by 2015 CA: 20% by 2010 AZ: 15% by 2025 HI: 20% by 2020 MT: 15% by 2015 MN: 25% by 2025 (Xcel: 30% by 2020) IA: 105 MW CO: 20% by 2020 (IOUs) *10% by 2020 (co-ops & large munis) *NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) TX: 5,880 MW by 2015 VT: RE meets load growth by 2012 WI: requirement varies by utility; 10% by 2015 goal IL: 8% by 2013 MO: 11% by 2020 ME: 30% by % by 2017 goal - new RE NH: 23.8% in 2025 MA: 4% by % annual increase RI: 15% by 2020 CT: 23% by 2020 NY: 24% by 2013 NJ: 22.5% by 2021 PA: 18%¹ by 2020 MD: 9.5% in 2022 *DE: 10% by 2019 DC: 11% by 2022 *VA: 12% by 2022 NC: 12.5% by 2021 *FL: 20% by 2020 State RPS State Goal

10 Renewable Energy in the Southeast Has Lagged Behind the U.S. Change is coming North Carolina recently passed RPS Gov. Crist (FL) pushing greenhouse gas legislation Expectation of carbon legislation / regulation Strong political support Environmental benefits Power supply benefits National security benefits Local economic benefits

11 Renewable Energy in the Southeast Hydro very close to fully developed Low wind potential (and in difficult locations) Limited solar potential (sun filtered by clouds) No geothermal potential World-class biomass resources

12 Momentum / Growing Demand Duke Energy Carolinas RFP NC RPS signed FL Executive Orders JEA RFP FP&L RFP NCEMC RFP PEC RFP FMPA RFP NSB RFP TECO RFP PEF RFP SEC RFP EKEC RFP AKEC RFP Others?

13 Biomass in the Southeast Southern Forest Resource Assessment: The South, particularly the coastal plain and the piedmont, contains the most intensively managed forests in the world. This one region of the United States produces more wood products that any other single nation. Timber harvesting, tree planting, and other forest investments have increased and forest inventories have expanded as harvesting and processing technologies have changed in ways that favor southern timber. Published by the U.S. Forest Service; Asheville, NC; 10/02.

14 Biomass Power Benefits Abundant supply in Southeast t Cost effective renewable technology (Photosynthetic Solar Collector) Firm electrical capacity Precursor to Liquid Fuel market Achieves substantial CO2 reductions at a reasonable cost

15 Comparison of Global Warming Potential All Cases Figure 1: January 2004 NREL/TP , Biomass Power and Conventional Fossil Systems with and without CO2 Sequestration Comparing the Energy Balance, Greenhouse Gas Emissions and Economics

16 Biomass Feed stocks Wood Residues Agricultural Residues Energy Crops Harvest and mill residuals Wood chips Wood waste pallets crate discards wood yard trimmings clean landfill diversions Corn stover Rice hulls Cotton Gin Waste Sugarcane bagasse Animal bio-solids Hybrid poplar Bamboo Willow Whole tree / Pulp chips

17 CCWE Change Over Time Biomass Sources for Fuel Cost Megawatts Tons Consumed Craven County Wood Energy 135% 125% WASTEWOODS -pallets 115% -clean wood from landfills -hurricane debris 105% -land clearing debris 95% -tree trimmings -plywood trimmings/ 85% particle board waste -brooder house poultry waste 75% -cotton gin waste BARK MILL RESIDUALS CHIPS -sawmills -forest residuals -pre-commercial thinningi Fuel Cost 100% 99% 101% 101% 98% 92% 96% 96% 94% 95% 100% 100% 101% 109% 117% 130% 132% Megawatts 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 107% 107% Tons Consumed 100% 97% 98% 96% 98% 87% 91% 89% 88% 84% 97% 80% 80% 91% 84% 96% 92%

18 300% CCWE Change in Fuel Cost Over Time 'Traditional' Fuel Cost Chip Cost Supply and Demand? 275% 250% 225% 200% 175% Byproduct becomes Product when demand increases Higher demand creates higher price Current marginal fuel stock is whole tree chips. 150% Next Pulp chips? 125% 100% 75%

19 Georgia On My Mind Quick Statistics Total Area (Acres) ~ 37.1 million Forest (Acres) ~ 24.8 million Total Inventory ~ 1 billion tons Annual Growth ~ 50 mil tons Annual Production ~ 40 mil tons Annual By Product / Waste ~ mill tons 50 MW Power Plant Requires ~ 600,000 TPY Implication 250 to 1350 Megawatt s of Infinitely Sustainable Capacity

20 All Live Merchantable Softwood Tree Biomass Green Tons per Acre of Timberland Softwood GTPA Million tons >35 USDA FOREST SERVICE SOUTHERN RESEARCH STATION Forest Inventory and Analysis Sources: USDA Forest Service,2007 Map Maker 2.1. For Information Visit: Produced July18, 2007.Author Spatial Data Services

21 All Live Merchantable Hardwood Tree Biomass Green Tons per Acre of Timberland Hardwood GTPA Million tons >35 USDA FOREST SERVICE SOUTHERN RESEARCH STATION Forest Inventory and Analysis Sources: USDA Forest Service,2007 Map Maker 2.1. For Information Visit: Produced July 18, 2007.Author Spatial Data Services

22 Population Density Map Population Density # of People Per Square Mile > Census At approximately 45 people/square mile, there is a 50:50 chance of practicing forestry. Virginia Study (D. Wear, et al., USDA Forest Service,1998). Compiled by R. Harper, J. McCollum USDA Forest Service, FIA R. Harper, USDA Forest Service, FIA At 150 people/square mile, forestry approaches zero

23 Average Annual Timberland Disturbance Types Timberland 500 Disturbances Treatment Disturbance Area (Thousand Acres) Final harvest Partial harvest Thi hinning Insects Disease Fire Weather Animals/ Grazing Other Human

24 Hugo Natural Disasters

25 What This Means To effectively compete in the energy business, producing sustainable renewable energy in the presence of developing RPS s, you must understand and be able to execute (both physically yand financially) in the underlying commodity markets for energy (inputs and outputs) as well as navigate the constantly changing forces of policy, regulation and economics.

26 US Petroleum Flow, 2005 (Million Barrels per Day) Future Threat or Opportunity? Energy Information Administration / Annual Energy Review 2005

27 Biomass Energy is Sustainable Energy

28 Questions? Decker Energy International, Inc. 152 Lincoln Avenue Winter Park, Florida (407)